Bulls And Bears

Market gets off to flying start in new year

China manufacturing data, weak US dollar help push STI near 2017's intraday high

Local shares enjoyed a flying start to the new year yesterday, thanks to positive manufacturing data from China and a continued weakening of the US dollar.

The benchmark Straits Times Index (STI) added 27.38 points to 3,430.3, with 1.49 billion shares worth $924.5 million traded. There were 334 gainers against 125 losers.

The STI is now within touching distance of last year's intraday high of 3,469.36 points. Once that is knocked off, the next target is 3,549.85, the post-financial crisis high achieved in 2015.

The biggest percentage gainers among the most active stocks by value traded were Cosco Shipping, up 8 per cent; Venture, ahead by 4.6 per cent; Singapore Press Holdings, which added 4.2 per cent; and Yangzijiang Shipbuilding, at 2.7 per cent higher.

For a spell, Brent crude traded over US$67 a barrel. Higher oil prices lifted explorers, as well as rig-builders like Keppel Corporation.

Higher oil also lifted crude palm oil, which continued to rebound off a December low. Palm oil-linked stocks like Wilmar International and Golden Agri-Resources rose. Still, analysts expect lower prices due to higher supply.

Real estate investment trusts continued their good run. CapitaLand Commercial Trust added 2.6 per cent to $1.98, a new 10-year high.

In the region, China stocks listed in Hong Kong rallied after a Purchasing Managers' Index that focuses on small and medium-sized firms beat expectations. The Hang Seng Index surged past the 30,000-point mark.

HSBC said in a report that the world is entering the new year at a "decent enough cruising speed", but it noted the risk of construction activity in China slowing.

The electronics boom is expected to benefit economies near China like Japan, South Korea and Taiwan. Firms there, and to a lesser extent in Singapore, specialise more in advanced semiconductors and other high-tech products.

In Singapore, precision engineer UMS, which makes components for Applied Materials, a semiconductor manufacturing equipment-maker, gained 5.9 per cent to $1.08.

Global sales of semiconductors are expected to rise this year, but at a slower pace than last year.

DBS economist Irvin Seah said yesterday that the manufacturing sector's growth could ease amid a lack of new smartphone product launches.

Nobody is listening to words of caution though. It is, for now, a happy new year.

A version of this article appeared in the print edition of The Straits Times on January 03, 2018, with the headline 'Market gets off to flying start in new year'. Print Edition | Subscribe